Liens

A lien is a claim or legal right against an asset that can be used to pay back a debt. An entity that is owed money may be able to seize the asset of the person that owes them and sell it so they can recoup the debt. Condominium corporations automatically have liens against an owner’s unit if that owner does not pay their common expenses fees.

A lien automatically expires after three months unless the condo corporation registers a Certificate of Lien with the Land Registry Office.

1. Registering the lien ensures that the condo corporation has priority in recovering money
2. If the lien expires, the condo corporation loses priority amongst other parties who have an interest in recovering the money.

This is what condos must do if an owner doesn’t pay their fees:

1. Send a Notice of Lien – A corporation can issue the Notice of Lien to an owner. If the owner doesn’t pay within 10 days, the condo corporation can proceed to step two.
2. Registering a Certificate of Lien – Corporations can register this certificate if the outstanding amounts aren’t paid within 10 days of the Notice of Lien. Certificates cover all amounts owed under the liens, including common expenses incurred after the registration of the lien, interest, legal fees and costs to prepare the Certificate of Lien.
3. Notice of Sale Under Lien – Corporations can initiate the power of sale process 15 days following the registration of the certificate of lien.
   • The Notice of Sale Under Lien includes information about the amounts owed, a description of the property, and details of the default.
   • The notice also sets out a “redemption date”, which is 45 days from the date of the notice’s issuance.
   • The condo corporation cannot take any further enforcement steps during this “redemption period” and the owner can use that time to pay the outstanding amounts.
     • If the owner pays, the condo corporation must discharge the lien.
     • If the owner does not pay, the condo corporation can file a Statement of Claim for possession of the condo unit with the Ontario Superior Court of Justice.
4. Judgment – Typically, condo corporations will seek that the Ontario Superior Court of Justice award them possession of the unit and any amounts they are owed. Corporations can also file a motion with the OSCJ 10 days after the judgement ordering that any remaining occupants be removed.
5. Selling the Condo Unit – Corporations and sell the unit and recoup the amounts they are owed under the lien from the sale proceeds. The condo corporation must then pay the balance of the funds to the former owner within 90 days of the sale.

Owners should communicate the issue right away with their condo corporation. The corporation may be able to agree to a payment plan with them or allow them to continue paying fees while they address arrears.

Owners can pay back any amounts they owe at any point during the lien process until their condo unit is sold. If they pay, the condo corporation must discharge the lien. Condo corporations rarely need to sell the condo units to recoup debts.